REGINA – SaskTel reported 2017/18 net income of $121.0 million from operating revenues of $1.253 billion in its annual report released this week.
The provincial Crown Corp said revenues fell 2.3% ($29.6 million) from the same period in 2016/17, primarily due to the economic environment, regional wireless pricing, changing consumer behaviour, and increasing competition which impacted its opportunities to offset revenue declines from legacy wireline services.
Revenues are composed primarily of wireless (40.9%); maxTV service, internet, and data (27.9%); and local access, enhanced services, and long distance (18.7%), continued the report. Legacy revenues continued to decline but were offset by revenue growth in wireless retail and broadband.
The company added that its 2017/18 financial measures focused on shareholder value, revenue, net income, and the intensity of capital investment, “given financial pressures that the province of Saskatchewan is experiencing; industry changes that are placing pressure on SaskTel’s revenues, costs, and profit margins; and the need to make significant investments in capital programs that are transforming our networks, operations, and service offerings”. Looking ahead, SaskTel said that it will seek new revenue sources from within the business market and will focus on continuous improvement of operational cost management.
“SaskTel has been proudly operating for the past 110 years and as the years have passed, our company has risen to the challenges posed by constantly changing technologies, and a marketplace that grows more sophisticated and demanding each year,” said acting president and CEO Doug Burnett, in the report. “And, while SaskTel has continually adapted its operations to face these new realities, the one thing that’s always stayed the same is our focus on delivering exceptional customer experiences.”
Other highlights from the report include:
– Wireless revenues decreased 2.7% ($14.0 million) year-over-year relating to the one-time negotiation of a wholesale contract in 2016/17. This was partially offset by continued growth in wireless retail revenues reflecting a growing postpaid consumer base and a higher blended ARPU;
– ARPU growth is attributable to an increase in smart phone penetration of 1.2% and customers migrating to price plans that offer more data and features. Prepaid access counts decreased year-over-year as a result of the CDMA exit in July 2017, when a large number of inactive prepaid accounts were terminated;
– maxTV, Internet, and data services revenue increased by 3.5% ($11.9 million), and its fibre-based services like infiNET service saw increased access growth of 21.6% as customers seek faster internet speeds;
– Local access and enhanced services declined by 7.9% ($16.9 million) from the same period last year due to a 6.9% reduction in network accesses, (2016/17 – 6.4%), as customers continue to replace their existing wireline services with a wireless alternative;
– Long distance revenues dropped 11.4% ($4.8 million) from 2016/17, reflecting fewer minutes as a result of wireline access erosion, technology substitution to wireless, and internet-based services;
– SaskTel invested an additional $302.0 million in capital expenditures during 2017/18 to improve customer’s experience today and create opportunities to provide additional enhancements and capabilities in the future. Of the $302.0 million, $250.8 million (2016/17 – $259.3 million) was spent on property, plant and equipment, including: Fibre to the Premises, wireless networks (LTE and Wi-Fi), access demand, and SaskTel facility renovation; while the remaining $51.2 million (2016/17 – $56.8 million) was spent on intangible assets such as customer support systems and inventory management systems.
The full financial report is available here.
